After quickly gaining traction with millennials, Junkee is conquering a new challenge: reaching the next generation of young Aussies.

This profile is part of a series of interviews we conducted in October and November 2018 to get a better idea of the media startup space in Australia. Specifically, we were trying to understand why there aren’t more media startups in a wealthy market like Australia. Our findings will be published in a report — paid by Facebook — later this year.

With research and reporting by Jacqui Park and Alan Soon. Jacqui is the research and strategy director for Splice Media and the Senior Asia Pacific Fellow for the Centre for Media Transition at the University of Technology, Sydney. Alan is Splice’s co-founder.

Sydney-based Junkee Media is going after an audience that's younger and more politically aware. Photo by Alan Soon.

In July 2013, as Australia was on the brink of electing its third Prime Minister in a year, two media veterans hatched a plan to “de-stupidify” the internet for the nation’s youth. Platforms such as BuzzFeed, they wagered, had a successful formula but underestimated young Aussies’ intelligence.

“We wanted to treat the audience like they had brains,” says Tim Duggan, now-publisher at Junkee Media. “We launched it as a semi-side project, and then the audience suddenly blew up.”

Duggan, along with Neil Ackland, Libby Clark and Andre Lackmann, were used to speaking on young people’s wavelengths after spending a decade running music media outlet Sound Alliance, which included the popular dance site inthemix (yes, that’s how they write it).

However, they soon realised millennials, their target audience, were far more politically aware, engaged and frustrated than mainstream media gave them credit.

“Politics was only meant to be one of the things we covered — music, TV and film were the others — but all of a sudden we saw most young Australians were really angry with Tony Abbott,” says Duggan.

“We harnessed that and turned the site into this beast we renamed Junkee Media in 2014. We knew it was the future.”

Using research to reach new audiences

Nevertheless, Duggan and now-CEO Ackland, who continued to run Junkee after Clark and Lackmann left, quickly realized that as their original audience grew older, they risked leaving their future market behind.

“The hunch last year was those under 24s, or Generation Zs, were very different to their millennial counterparts,” Duggan says. “We needed to speak to them in their language or our media would grow up and not grow down.”

For the now 37-year-old Duggan and Ackland, staying clued up on the kids was not something they could do on hunches alone. As such, Junkee Media has invested heavily in carrying out research on the youth market and its evolution, surveying up to 30,000 people over nine years.

The fruits of this exercise led to the launch of Gen Z-focused site Punkee in 2017, which now features Junkee’s immensely popular recaps of reality shows The Bachelor and Bachelorette.

Today, the business commissions research firm Pollinate to test out its hypotheses on audiences and then uses the results to inform both content and commercial deals. While to some this may seem a costly and time-consuming exercise, for Duggan this background work has effectively given Junkee its reason for being.

To be successful, he says, publishers should ensure they only target communities they can speak to authentically. “Then they must speak to them every day and continually re-adjust those assumptions because the readers you talked to five years ago may have changed.”

“We wanted to treat the audience like they had brains," says Junkee Media's publisher Tim Duggan. Photo by Alan Soon.

Fighting ‘tooth and nail’ for ad dollars

Building a successful media company in Australia is far from easy. With hundreds of players fighting for an ever-diluting pool of advertising expenditure, it remains no surprise venture capitalist funding has remained elusive.

“Most of the media outlets have already been made,” Duggan admits. “It would be very unlikely to succeed. You may make some money, but not enough that a VC would require.”

At Junkee Media, the commercial model is built on a roughly 50/50 split between native advertising on Junkee and Punkee, and the company’s content agency Junkee Studio.

On the media side, native generates 60% of revenues, while the rest is made up through display and event sponsorship. Meanwhile, Junkee Studio — in a model similar to that of Vice’s content agency Virtue and The New York Times’ T-Brand — currently creates native, video and digital content for brands such as Qantas and Westpac.

Although Duggan agrees the model has helped them “survive and thrive”, he admits it is no silver bullet. “The media industry is a very competitive space,” he adds. “We fight tooth and nail for every advertising dollar.”

Investing in the future

Fortunately for Junkee Media, they have backers. Since 2016, the company has been owned by oOh!media, Australia’s largest outdoor company, which is worth more than $1.5 billion.

Duggan says the acquisition took away the cumbersome worries of cash flow, payments and human resources, while letting the founders maintain a degree of independence.

Now, Duggan and Ackland have their eyes firmly set on the future — particularly finding new ways to speak to their audiences.

In 2016, Junkee teamed up with comedienne Jordan Raskopoulos, co-creating a video calling for Australia Day to change its date to May 8. (Why? Because it sounds like mate.) According to Duggan, the video reached half of the nation’s population in three days.

Other efforts include delving into iMessenger chatbots, which send messages to subscribers alerting them to Punkee’s Bachelor recaps. The open rate is usually around 95%, Duggan says.

Looking ahead, the company is also investing in developing voice technology in the hope of bringing Junkee content to Amazon’s Alexa devices.

“We’ll always be digital-first and maintain that startup essence. The mentality is to be agile, quick to try new things, experiment, fail fast and just be really curious,” Duggan says.